Delaware, constituent state of the United States of America. The first of the original 13 states to ratify the federal Constitution, it occupies a small niche in the Boston–Washington, D.C., urban corridor along the Middle Atlantic seaboard. It ranks 49th among the 50 U.S. states in terms of total area and is one of the most densely populated. The state is organized into three counties—from north to south, New Castle, Kent, and Sussex—all established by 1682. Its population, like its industry, is concentrated in the north, around Wilmington, where the major coastal highways and railways pass through from Pennsylvania and New Jersey on the north and east into Maryland on the south and west. The rest of the state comprises the northeastern corner of the Delmarva Peninsula, which Delaware shares with Maryland and Virginia (hence its name). Most state government operations are located in Dover, the capital.
Over the years Delaware has been called the chemical capital, the corporate capital, and the credit-card capital of the United States. Its liberal incorporation laws and a Court of Chancery that specializes in the most-complex issues of corporate governance and finance have encouraged many American and foreign businesses to make Delaware their nominal home.
Delaware is one of the world’s most popular jurisdictions to incorporate a company. Nearly half of US publicly traded companies and more than 65 percent of all Fortune 500 companies are incorporated in Delaware. Including giants such as Apple, Coca-Cola, Google, and Wal-Mart.
Delaware stands out for its separate Court of Chancery, the oldest business court in the US, specialized corporate law cases. The Court of Chancery use judges instead of juries and are usually expertized in complex corporate law matters.
Delaware Court maintains the most advanced and up-to-date case law, that allows for predictability and therefore decreasing liability and litigation among Delaware companies.
Limited Liability Company (LLC).
|Governing corporate legislation|
Delaware Limited Liability Company Act (Title 6, Chapter 18, Delaware Code)
A Delaware LLC may be set up by one or more members, who may be natural or legal persons, resident or non-resident, without limitations.
LLC members may act as managers, or alternatively, they may appoint a manager. Corporate managers are allowed.
|Information published relating to company officers|
The identity of the LLC registered members may not be publicly disclosed.
LLC members may act as managers, or alternatively, they may appoint a manager. Corporate managers are allowed. Details are not available to the public.
The liability of members is limited to the extent of their capital contributions.
|Accounting requirement/ compliance|
Accounting records must be kept and shall be sufficient to show and explain the company’s transactions. The books, records and minutes of the company may be kept in any place or country at the Manager’s choice.
LLCs are fiscally transparent; profits and losses may be passed through its members and subject to Personal Income Tax. Alternatively, you may elect to have a Delaware LLC taxed as a C Corporation with the IRS and subject to Federal Corporate Income Tax.
Delaware LLCs may require a Federal tax identification number (EIN). Additionally, most banks require an EIN in order to open a business bank account.
Delaware requires LLCs to file an Annual Franchise Tax Statement by June 1st. The fee is $300. Delaware does not require LLCs to file annual reports.
Foreign-owned LLC that conducts no business in the US and has no US source income, deductions, or credits does not create US federal personal income tax liability and does not create a requirement to file US federal income tax returns.
Foreign members may be required to disclose reportable transactions between them and the entity, filing the IRS Form 5472.
|Corporate income tax|
A corporation organized or established under the Delaware General Corporation Law is tax resident in Delaware and the United States.
Delaware limited liability companies may elect to be taxed as a C-Corporation or as a disregarded entity.
Corporations are subject to federal income tax and state income tax.
Alternatively, an LLC may elect to be treated as a disregarded entity.
This means that may not be subject to Federal Corp Income Tax, and profits and losses may be reported through its members’ personal tax return.
Therefore, if its owners are Non-US Residents (and not subject to Personal Income Tax) and the LLC does not operate and generate profit from the US, does not lease or own properties within the US and does not have US employers and no US effectively connected income, offshore income accrued by a Delaware LLC may not be taxed in the US.
C-Corporations are subject to federal income tax at a 21% rate.
Income derived from Delaware is subject to State Income Tax at 8.7%.
|Shared capital/paid up|
There is no need to register a minimum or maximum capital contribution.
|Basis of the Legal System|
Under Common Law.
corporations may issue 1 or more classes of stock or 1 or more series of stock within any class thereof, any or all of which classes may be of stock with par value or stock without par value and which classes or series may have such voting powers, full or limited, or no voting powers, and such designations, preferences and relative, participating, optional or other special rights, and qualifications, limitations or restrictions thereof, as shall be stated and expressed in the certificate of incorporation
Every Delaware LLC must have an agent for service of process in the state. This is an individual or business entity that agrees to accept legal papers on behalf of the LLC. If the LLC is physically located in Delaware, it may act as its own registered agent. A registered agent may be either an individual resident or business entity that is authorized to do business in Delaware. The registered agent must have a physical street address in Delaware.
There is no statutory requirement for any formal meetings of members.
|Time to form|
Delaware has an efficient Registry: 2 days formation time.
June 1st / each year
Convenient world time zone: GMT-5
The State of Delaware offers a high level of anonymity and privacy.
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